Virginia Uses Influence To Get 'Bandwidth on Demand' Going

Virginia Uses Influence To Get 'Bandwidth on Demand' Going

Sep 24, 1999

Nick Giordano

By Steve LeSueur, Staff Writer

The Virginia government is using its buying power and influence to help establish an advanced, broadband telecommunications network to begin providing the state's private sector with "bandwidth on demand," as of Oct. 1, state officials said.

"Our goal is to have high bandwidth readily available throughout the state, wherever it is needed and at reasonable, level prices," said Mike Thomas, deputy secretary of technology for Virginia.

The new program, as yet unnamed, would be similar to Net.Work.Virginia, a network service that provides the state's public sector with universal access to digital communications services.

Officials anticipate that a network for the private sector will stimulate economic development and attract new business to the commonwealth.

The Vision Alliance, a consortium of about 20 local exchange companies led by Bell Atlantic-Virginia, is teamed with Sprint Corp. of Westwood, Kan., to deliver data, voice and video capabilities in the Net.Work.Virginia program, which is also available to local governments and education entities.

State officials have been trying to persuade these and other companies to provide similar network services to the private sector.

The new program will not create a single consortium of telecommunications providers, but instead help organize different alliances among the providers to ensure that services are available throughout the state.

"What I'd like to see is every carrier, local and long-haul, involved in providing services," said Thomas.

Thomas emphasized that there will be no state subsidies involved. Rather, Virginia, which spends about $45 million annually on telecommunications services, has used its buying to stimulate the building of a network infrastructure that covers the entire state, and that telecommunications vendors now can make available to private-sector businesses.

Net.Work.Virginia's portion of the state's telecommunications budget is only about $3 million annually, but among its functions, the network helps to fill gaps in available telecommunications services and provide lower prices to its users.

In addition to serving as an anchor tenant for the statewide infrastructure, the Virginia government has brought together the telecommunications companies to help facilitate the building of partnerships to provide network services for the private sector.

"A lot of this would happen on its own, but the state can help push some of it forward," said Thomas.

The government wants to boost the state's economy, especially in the rural areas. While high bandwidth services already are available in metropolitan areas, businesses in many less-populated towns do not have access to these services, or can get them only at exorbitant prices.

At the same time, officials believe the network will open up increased opportunities for the telecommunications companies. Net.Work.Virginia, for example, is now connected at 532 sites, more than twice the size originally envisioned by state officials when they started the program three years ago, said Thomas.

Because of certain regulatory and legal requirements, an independent organization must hold the contract for the new network serving the private sector. Virginia's Center for Innovative Technology, a non-profit organization in Herndon funded by the state, is being considered for this role, said officials.

While other states also leverage their spending on telecommunications to create broadband infrastructures, Virginia officials said they are the first to get the guaranteed service to all regions of the state.

Others states that have put in place innovative programs include Iowa, North Carolina and Tennessee.

Pennsylvania officials are reviewing proposals from two consortia of top information technology and telecommunications companies to provide the state with an array of telecommunications services. The state expects to award a contract in March 2000 and begin work in July on a project that will be worth about $80 million annually.

Like Virginia, Pennsylvania wants to use its spending to stimulate the creation of a privately owned telecommunications infrastructure that can be used not only by state agencies, but also by local governments, schools and private industry.

Consequently, state officials are evaluating proposals based on how the state as a whole, and not just the government, will benefit.

"We are very encouraged by the way the process is going," said Nick Giordano, Pennsylvania's project director for the acquisition effort.

The two competing consortia are the Pennsylvania Advanced Communications Alliance, led by Bell Atlantic, Science Applications International Corp., and AT&T Corp.; and the PA Team, led by Adelphia Business Solutions, formerly Hyperion Telecommunications of Coudersport, Pa.

While industry welcomes efforts by state governments to enhance their own telecommunications services, some are wary of the government getting too involved in trying to influence the deployment or pricing of these services in the private sector.

"A lot of companies already are rolling out services as quickly as they can," said Mark Uncapher, vice president and counsel for information services and electronic commerce with the Information Technology Association of America. The Arlington, Va.-based ITAA represents more than 11,000 companies.

Uncapher said gaps exist in services to certain regions, but he said the more productive way to encourage technology is to have a competitive marketplace.

"The way to do this is not to rely on government jawboning, but to expedite competition that can drive the marketplace," he said.

Virginia officials said they also believe strongly in the marketplace, but that a little prodding can help speed the process.

"Once it begins, we think competition will take over and more companies will want to jump in without being pushed by the state," said Thomas.